CBS & Viacom Explore Merger Again

The news on Wednesday that CBS and Viacom were once again exploring a merger opportunity should come as no surprise given that the same person, Shari Redstone, is “running the show” at both corporations because her father, who is the chairman of CBS is very ill.

The potential merger is being driven by a strategy to get ahead of the likely merger of AT&T and Time Warner which would create an enormous media conglomerate. The recent merger that is likely to meet full approval between Disney and FOX is another reason for CBS and Viacom to view each other as a potential “port in the storm” scenario.

The combination of the two entities would combine television/media content creation and broadcasting with the expertise Viacom has in distribution of that content. The ability to have expertise in both areas is becoming a necessity in the mainstream media in order to be able to negotiate profitable distribution agreements.

Furthermore, the synergy of content creation/broadcasting and distribution is becoming crucial for the smaller players in the industry to be able to stay relevant with the competition from Disney/FOX and AT&T – Time Warner (AT&T also owns DirecTV).

This is especially relevant when you consider that AT&T has a market cap of over $200 billion and CBS has a market cap of $23 billion. In the event that AT&T merges with Time Warner that number could be close to $300 billion. The Disney and FOX deal will put that combined corporation at around $250 billion in market cap.
The CBS – Viacom deal might become a necessary move to ensure their own survival in the changing media landscape. The distribution of content is critical, and control of content is also an integral part of the connection between content and profitability. The two companies have several areas of cross-compatibility which is suitable for a merger opportunity.

The merger, if approved, would potentially bring together a more robust stable of networks that are widely available on basic cable packages that would provide leverage for CBS & Viacom when negotiating the carriage fee agreements.

This same principle would apply outside of the U.S. domestic market where a combined entity would be a serious player in the international media / television broadcasting space. My own depth of knowledge is not in the international market but plenty of coverage is out there on that area of this potential deal.

The streaming service that CBS operates called CBS All Access would gain a significant increase in content by merging with Viacom. CBS would also obtain the control of the Viacom owned Paramount movie studio, which should be noted is struggling at this point.

Wall Street is not keen on this deal, according to Forbes they do not see the synergies or the market caps of the combined entity being significant enough to make a difference in the media industry at this point. It also notes, as other major financial news outlets have noted, that CBS is a ripe target for being obtained themselves by Verizon.

The Verizon-CBS rumor has been long running now and it remains to be seen if Verizon wants to take that strategic dive into the network television arm of the industry. The resources of Verizon would be a significant deal within the media industry that would create some serious ripple effect.
However, for now, at least for the next few weeks the focus will remain on CBS and Viacom and if they can determine the parameters of a deal. The combination will not reshape their industry segment but it will have an impact on the way content is controlled and distributed. In that sense, this deal is significant because with the meteoric rise in streaming television programs, content rights are king. CBS would hold the keys to some important properties. Stay tuned.

(some background provided by CNBC, Recode, Forbes, CNN

Call Waiting: Verizon Back Peddles On Merger Rumors

The news out of Verizon on Thursday is that the comments made by their CEO, Lowell McAdam, were taken out of context regarding a potential merger involving the telecommunications giant.

The CFO of Verizon, Matthew Ellis, attempted on Thursday to clarify earlier remarks made by Mr. McAdam to the media. Those comments alluded to a potential merger of Verizon with Disney, Comcast, or CBS.

However, Mr. Ellis today offered a different explanation in stating that Mr. McAdam was answering a question about whether or not he would “take a call” from Disney, Comcast, or CBS. The comments are now being walked back by Verizon, today they clarified that they would be open to strategic partnerships with those entities and not an actual merger.

This clarifying statement from Verizon comes after several financial news sources ran with a story that Verizon was exploring a merger, and the stock prices of those three entities involved: Disney, Comcast, and CBS all saw increased trading activity.

It is no secret that Verizon is looking to grow certain aspects of their business, the acquisition recently of Yahoo is proof of that strategy. The senior management at Verizon have steered away from obtaining other large media companies, which is unlike their other competitors in this space. The deal between AT&T and DirecTV jumps to mind as the type of avenue to growth that Verizon has repeatedly avoided.

The earnings call with Mr. Ellis today described what Verizon calls “organic growth” of the company. The exact definition of that strategy is not completely defined, but like any other communications provider and internet service provider, Verizon is consistently looking for content. The old “content is king” mantra is still paramount in this industry space.

In an increasingly visual world, the demand for video content is at the core of what Verizon needs to fill within their own content pipeline. It is in this vein that a strategic partnership or some sort of partnership agreement with Disney, Comcast, or CBS would make sense for Verizon. Those entities have their own exclusive content or partnerships to provide content for other entities such as Major League Baseball, the National Football League, and the National Hockey League.

The demand for sports content is always robust and the demand for other types of entertainment in digital platforms is a demand curve that Verizon is going to be relentless in trying to meet over the next several months. The earnings call also came on Thursday amidst reports that the Verizon FIOS television service has lost over thirteen thousand subscribers in a short amount of time.

The streaming media services and the growth of other platforms to watch content is causing many Americans to “cut the cord” on cable, telco, and satellite TV services. The “on demand” culture and the binge watching patterns of the new ways that consumers expect has caused the drop off in the FIOS subscriptions.

This could create conditions where FIOS, AT&T/DirecTV, and Comcast are forced to reinvent themselves and provide more value to the consumer for the service. The advent of the DirecTV service that allows the viewer to watch at home or on a tablet or smart phone is a step into the future of the television trends to follow.

The question of whether or not Verizon is exploring a merger is a complicated one. It would make some degree of sense on one hand given the complexities facing the industry and the changing dynamics of digital content consumption.

Verizon is also prepared to face rather significant anti-trust regulatory reviews especially if they were to merge with Comcast, which would absolutely create a monopoly in the industry. That merger would have far-reaching implications for both private homes and small businesses as the internet is needed for doing really everything today from shopping, to watching movies, and to work related functions.

It remains to be seen whether Mr. McAdam was taken out of context, or whether there is more than meets the eye with this story. The ambitions of Verizon will come into focus in the near future. The company should, at the very least, consider some kind of partnership with another media company to fill the video content gaps that exist currently.

Verizon also knows that mergers or acquisitions are a complicated process and that ties up time and resources from being able to grow the company in other ways. In the end, only time will tell which direction they choose to grow their business in an increasingly competitive, evolving, and cost driven environment.

Fall TV Season Reviews: Six Weeks In

The Fall television season is about six weeks into the schedule and with a review of the ratings to this point. I have done this the last few television seasons and reviewed ratings at the sweeps periods, and I have had some time for late night viewing of some shows on demand or via streaming services as well.

Those of you who have kept up with my blog here at Frank’s Forum are aware that I am not usually a fan of many of the new shows on the network slates in any given year. There have been a handful of shows that I would even recommend that any of you devote any of your valuable time to watching and following on a routine basis.

However, this season I am surprised that there are a few shows that have exceeded my expectations out of the gate. There are others that I have not seen but have read reviews from other writers whom I trust and have analyzed their ratings to know that they will most likely be cancelled.

No Bull

The first new show that I would recommend watching if you have not done so already is the CBS drama, Bull, starring Michael Weatherly of NCIS fame. I read a review of the show before it aired which was not very favorable, so I approached the pilot episode (which my wife really pushed me to watch) with trepidation.

I was pleasantly surprised, Weatherly is excellent as Dr. Jason Bull (a character adapted and based on the early life of Dr. Phil McGraw) who is an expert psychologist in the field of reading jury reactions in court proceedings. The cases are very interesting and thought provoking, the human behavior aspects are fascinating at points, and the cast is very strong. It is a very likeable show that will definitely entertain and is the character development, the writing, and the production are all excellently done. CBS has averaged around 17 million viewers and it is the top new show of the season for a reason, this program is poised to be another major hit for that network.

NBC Strikes Gold

I must admit that when I saw the trailer for the newest NBC drama, This Is Us, I thought it was a hastily produced fill-in for Parenthood which NBC ushered out of the lineup after a very strong multi-season run. However, this program written by Dan Fogelman is brilliant in the conception and the direction of the character arcs.

In an innovative way (without giving anything away to those who have not watched) it follows the lives of several people all at the same stage in life (mid 30s) and chronicles the unique challenges, joys, and heartaches that each has at that particular point.

The stories are woven seamlessly into themed episodes and the acting is excellent from Mandy Moore, Milo Ventimiglia, and the rest of the outstanding cast that makes this show the second most watched new series and a bona fide hit for NBC.

The only thing that could derail the momentum of this show (which has a massive social media following) is NBC getting involved from a top executive level and making changes to the creative direction or moving the time slot of the show (which that network does often) and it ends up ending in a loss of ratings.

This show is raw and real and very well produced, the writing is excellent, and it is well worth your viewing time.

Designated for Success

The ABC hit drama Designated Survivor looks like it is designated for a successful run on the network after very strong ratings to this point in the new television season. This newly launched show features Keifer Sutherland as the top billed star and the lone surviving Cabinet level official following a terror attack on the Capitol building during the State of the Union address.

I must admit two things: I did not like the premise of the show and the events that precipitate the conditions which the plot line launches, and I have not actually seen this program I have just read some very strong reviews about it.

I would think that it would have to appeal to those who like suspense and government spy type concepts to be the captive viewer for this program. I would tend to be of the opinion that if the ratings are this strong it is usually worth viewing the pilot episode and making a decision from there about it.

Kevin Can Wait

The new Kevin James comedy concept from CBS titled Kevin Can Wait has garnered some pretty strong ratings numbers despite being positioned to the male viewing demographic on Monday nights (opposite Monday Night Football).
In my opinion, the show has always struck me as a retread of the same antics that Mr. James used in his prior TV series hit, The King of Queens. I know that he has a loyal following of fans, but I personally think that you can wait on watching this series for the time being.

MacGyver It

I remember the original version of MacGyver and all of the wild scenarios that the lead character would get himself out of by coming up with some hair brained solution using normal items you would find around your house or garage.

The new CBS reboot which comes under the production guidance of Peter Lenkov (one of the guys who rebooted Hawaii 50 for CBS with great success) but the lead guy, Lucas Til, does not have the right look to be taken seriously as the new MacGyver.

The show has gained a pretty significant rating (the fifth most watched new series) but they will be walking the line between edge of the seat action and completely nonsensical, over the top stunts that could eventually drive away viewers.

Leaking Oil

Several returning shows are losing viewers like a truck leaking oil. The notables among those are two ABC programs Quantico and MARVEL Agents of Shield which will both probably meet with cancellation soon. In fact, ABC has another problem with a new series called Notorious (which is filling a lineup slot while Scandal is on hiatus due to Kerry Washington being pregnant) where the network announced they cut the number of episodes that will air already due to sagging ratings.

The TV industry calls that type of order reduction a quasi-cancellation, and so that series is definitely not worth your time.

The once popular series, How to Get Away with Murder has taken a tremendous decline in viewership this season to the point where it will most certainly be designated for cancellation in the near future.

The ABC network ratings overall have taken a big hit in a declining manner. They have to hope for stalwarts like Greys Anatomy and Modern Family to keep the ratings curve from bottoming out until they can begin production again on Scandal. The network will most assuredly also have a number of mid-year concepts that they will roll out in the winter for testing which could help buoy the ratings tide.

Deflated Ratings

The NFL once dealt with a major issue surrounding deflated footballs, it now has an issue with deflated ratings. The once gigantic ratings producing machine that was live NFL football game broadcasts are no longer the market leader they once were.

The NBC Sunday Night Football telecast was consistently the highest rated program of the week nearly every week that it aired for years. The telecast has experienced double digit ratings losses in 2016. There are some news media sources that track the ratings decline and tie it to the huge ratings that Sunday evening cable news programs are drawing due to the November Presidential election.

The other main national television “windows” for NFL broadcasts are down as well, Thursday Night Football is usually a reliable to be among the top five programs in the week and sometimes will crack the top three in the ratings charts. This season that package of games has also seen a double digit decline in ratings. This is driven by two factors: the matchups for the teams in most of the games have not been compelling, and the national anthem protests have also hurt the ratings for football overall as well.

The ESPN tradition of Monday Night Football has taken the most precipitous decline with viewership of their telecasts off as much as 25% from last season. That is a steep decline for a live sports content product as highly desirable as the NFL usually commands within the television industry. The biggest issue for this telecast and the other national television windows for the league is that the advertisers shell out some serious money for featured commercial time on these live game telecasts. The NFL ratings dip is cause for concern because they might hit the “giveback” territory in the numbers, where the advertising dollars get returned to the sponsors if the ratings decline to a certain threshold.

This type of scenario would impact the networks which pay huge rights fees to the NFL to broadcast the games. The league office in New York is reviewing the ratings decline, but it is certainly something fascinating because the numbers were once off the charts and now they have hit the wall.

Some of you may recall the piece I wrote on the oversaturation of the NFL on television. I wrote, once upon a time, about whether the league had reached a point where there were just too many games on TV and the impact that oversaturation would have on the ratings. It seems like we may have hit that point now.

The television season is still in the early stages, we have February “sweeps” and May “sweeps” periods left to go before all is said and done. We also have an election night in 12 days, and the holidays with specials and movies on the horizon. The networks have some shows they will keep for years, and others they will dump after a month or two. The major networks are split with CBS and NBC doing very well in overall ratings, while ABC, FOX, and the CW are in a ratings plummet that seems to get deeper by the week.

It will be interesting to see when we check in again around The Super Bowl and February sweeps, until then, stay tuned and keep streaming!

“Must See TV” – NBC Gains Rights to Thursday Night Football

In reading the news earlier this week that the NFL had reached agreement on a new television contract for the Thursday Night package of games and that the rights to those games would be split between CBS and NBC; I could not help but think that NBC finally could reclaim their lost title of “Must See TV” for that night of the week.


I remember growing up that NBC owned the ratings on Thursday night, which continued into my high school and college years as well when the network cranked out new episodes of shows like “Friends” . Then later still it was “The Office” and a decent comedy lineup that anchored Thursday nights on “The Peacock” network.


However, that all changed for the network TV landscape with the advent of streaming devices and services such as Netflix, Hulu, and Amazon Direct that made live television viewing a concept of the past. The busy nature of people’s lives coupled with the fact that nobody works from 9 to 5 anymore, fueled that change towards the way we watch television.


The lone exception, as I have written about previously, is live sports programming. The ratings for sporting events of essentially any kind are “ratings gold” for the network which holds the broadcasting rights. The NFL takes this trend and puts it into essentially a “five times multiplier” with nearly all the top 10 most watched “programs” on TV in 2015 being NFL football games.


The ratings bonanza surrounding NFL games makes the addition of the Thursday Night Football package by NBC even more influential to advertising revenue and sponsorships that the network can attract. The network can also utilize “drop ins” to promote their own programs and events that are upcoming to a huge and diversified audience. NBC already receives a tremendous ratings boost through their agreement to broadcast Sunday Night Football which frequently is either the top watched program of a given week or in the top three spots. That ratings jump has boosted their overall viewership levels in the past and the promotional aspects of that broadcast have definitely had an impact on the ratings of their other programs.


Steep Price


NBC and CBS paid a steep price for the rights to broadcast five Thursday Night NFL games each over the next two seasons ($450 million combined between the two networks per year) which demonstrates the amazing draw that NFL live games have on advertising revenue for the networks.


In the case of NBC, they have been struggling to rebrand Thursday nights to compete with CBS and the other networks. They needed this share of the NFL package much more than CBS did, as CBS is the most watched network in terms of total viewership. Then, on the other hand, the fact that CBS has over the past two years pre-empted their regular Thursday night programming (in the Fall sweeps period no less) for NFL football demonstrates the enormous draw of the NFL. The shows in the regular CBS Thursday night lineup generate rating numbers that other networks can only dream about, yet CBS is committed to expanding their relationship with the NFL on that weeknight for two more years.


I must admit that following the ratings and the world of both media and sports business related topics, I did not initially understand why CBS would have paid the broadcasting rights fees that they shelled out for the Thursday night games initially two years ago. However, over time, I understood what the NFL and CBS were looking to do and subsequently accomplished with that initial contract. The league realized that the Thursday night games could be an attractive package to sell separately while keeping those games on NFL Network. They also identified a need to provide better promotion to both the games and the broadcast itself to make them look and feel like a “stand alone property”.


The addition of CBS Sports to that mix accomplished all of those objectives. The Thursday night games received an enhanced production value from CBS as well as their top announcing team of Jim Nantz and Phil Simms (who will continue to work those games in the new contract) CBS created theme music for the Thursday night telecast and cross-promoted the package very well to appeal to a wider audience.


Now, the Thursday night package will take another step in the evolution with the addition of NBC to the fold, and the NFL will gain viewers from cross-promotion efforts on NBC programming. In addition, NBC will most assuredly use their Sunday Night Football platform to promote the upcoming Thursday Night game so that will be a very effective marketing tool.


Streaming Sold Separately


The NFL also announced that with this new Thursday night television package they would be selling the rights to stream the games over the internet separately. The streaming capability was an aspect that both CBS and NBC were hoping would be included in their contract so that they could gain additional revenue from advertising on that platform.


The NFL will now begin negotiations for the streaming rights to the Thursday night games with the obvious players being mentioned in reports: Yahoo!, You Tube, Facebook, and Amazon. The NFL partnered with Yahoo! during the 2015 regular season to stream one of the games played in London between two subpar teams, the Buffalo Bills and the Jacksonville Jaguars, and the experiment was a huge success. It remains to be seen if the recent issues surrounding Yahoo! and their announced plans to cut jobs and shut down certain areas of their business will impact these negotiations. It also bears watching if Verizon will make an attempt to purchase the internet search giant outright (Verizon and the NFL have an exclusive agreement to show live local games on Verizon supported devices).


The recent Thursday night NFL broadcasting deal made two things clear: live sports programming is the gold standard which is keeping both network and cable television relevant, and that NBC finally has something deemed as “Must See TV” at least for five weeks out of the year.

Summer TV Heats Up: Broadcast TV Ratings Review

The summer television season in the United States was once a barren terrain consisting of re-broadcasted programming from the main television ratings “sweeps periods”, also known as “reruns”. It has also been a time for some limited engagement mini-series type events, and when I was a child I remember ABC TV out of New York running children’s movies in primetime slots during the summer months. The other broadcast channels would use the primetime slots to broadcast “second run movies” during the week, and especially on Saturday nights from May through early September.


That dynamic then changed slightly to a situation where the “Big Four” networks (later adding CW Network, Univision, and My Network Television) would be comfortable in conceding the summer months to the cable networks. They would let the cable networks dominate the ratings without putting much effort into production of any new programming options.


Eventually, due to the growth of cable and satellite television providers, and the advent of internet streaming services such as Netflix and Amazon; the major networks decided to become real competitive players in the once dormant summer broadcasting period.


Summer Ratings Heat Up


The decision by the “Big Four” broadcasters (plus the CW network which skews towards the key summer demographic: kids, tweens, teens, and young adults all home from school) has created a scenario where the summer TV ratings and subsequent advertising dollars are becoming a growing ancillary revenue stream for the networks.

The timing of the decision about 4 years ago was right too, Americans were caught in the grip of an economic recession. Many families were forced to forego their usual summer vacation plans, and very hot periods of weather in the summer of 2010 and 2011 kept people indoors which drove up television viewership levels.


Each of the “Big Four” networks have, over the course of the past two to three years, developed their own “mainstay” show which drives their summer programming. Currently, it is 12 weeks into the summer television season (which begins the day after the May sweeps period ends) so I thought it would be an ideal time to review the ratings for this summer.


First, some background on each network and their approach to summer programming:

  • NBC – their approach at “the Peacock” to the summer months centers around two programs: America’s Got Talent (A.G.T.) and Night Shift. They run the A.G.T. talent search program on two nights: Tuesday (new content) and Wednesday (the results show). The show has been a huge success for the network and is a family friendly show which is appealing in the summer.
  • CBS – they bank their success on science fiction type programming to capture the interest of the crucial 18-49 ratings demographic with Under The Dome (which set summer ratings records for them in 2013) and a new program featuring Academy Award winning actress, Halle Berry, called Extant. The strategy at CBS, like everything else they do lately, has been very successful. Extant has the best ratings of any new show this summer. Then the long time mainstay program The Big Brother reality series came from out of nowhere to outperform expectations and become a huge hit for the network this summer.
  • ABC – the summer season is jump started by the NBA Finals with live sports television being the new gold standard for television ratings. This summer’s edition of basketball’s biggest series provided a huge ratings boost to the network with a 6.1 rating and a 20 share in the 18-49 demo per Nielsen. Then in mid-June (the NBA Finals ended on Father’s Day) the network shifts to their other summer centerpiece The Bachelor/Bachelorette reality series depending on where they are in that cycle. The summer of 2014 brought a Bachelorette series into the mix which ended up being the 8th most watched program in total viewers and made it into the Top 10 at the 10th spot of top ratings for the 18-49 age group with a 2.07 Nielsen rating.
  • FOX – their strategy was to reintroduce a short series run of their one-time hit show 24 starring Kiefer Sutherland, called 24 Live Another Day which is an action/suspense thriller type program. The strategy worked with the program in the Top 5 for overall viewers this summer. Their other featured summer program is the cooking competition series with the volatile and unpredictable celebrity chef Gordon Ramsey titled Master Chef.


Summer TV: By the Numbers


After 12 weeks, the summer TV ratings have solidified to the point where some finite results can be determined. The ratings from Nielsen are based on the total of 115.6 million television households in the United States with a single ratings point representing 1% or 1.156 million households tuned to the program. The share is the percentage of all the televisions in use during that time slot which are tuned to a specific program. In the most recent data from Nielsen, the ratings breakdown is as follows:


Total Ratings by Network:

  • ABC and NBC are tied at the top of the leader board in the total ratings with a 1.4 and a 5 share in the 18-49 demographic. However NBC has the edge between the two in total viewers with 5.48 million compared to ABC with 5.1 million – both figures for both respective networks are down 7% from last summer.
  • FOX is in third place, just barely, with a 1.2 rating and a 4 share of the 18-49 demographic which is down 14% from last summer.
  • CBS is in fourth place with a 1.1 rating and a 4 share of 18-49 which is down 8% from the summer of 2013. The silver lining is that CBS averages 5.83 million primetime viewers this summer, which demonstrates the trend of older viewers who tend to be loyal to the network.
  • CW Network (joint venture between CBS and Warner Brothers) is last with a 0.3 rating and 1 share of 18-49. However their total viewership number is 7% higher than last summer.


Top Shows by Total Viewers


  1. America’s Got Talent (Tuesday) =         12.5 million average
  2. America’s Got Talent (Wednesday)=   10.3 million average
  3. Under The Dome    =                                  10.1 million average
  4. Extant                        =                                  9 million average (best new show)
  5. 24: Live Another Day        =                      8.55 million average
  6. Night Shift                            =                      8.3 million average
  7. Unforgettable                     =                      7.65 million average
  8. Bachelorette                        =                      7.35 million average
  9. Big Brother  (Sunday)       =                      7 million average
  10.  Big Brother (Wednesday) =                   7 million average


Top Shows in 18-49 demographic

The following are the top shows in the 18-49 demographic which is important to note because while another show might have more total viewers, the shows that rank highly in this list can charge more for advertising time which generates more revenue for the network.  This list is calculated by overall 18-49 group rating:


  1. America’s Got Talent (Tuesday) = 3.1
  2. Big Brother (Thursday) =                            2.49
  3. Big Brother (Sunday) =                  2.45
  4. Big Brother (Wednesday) =         2.43
  5. Under the Dome =                         2.43
  6. 24: Live Another Day =                2.39
  7. America’s Got Talent (Wed.) =    2.38
  8. Master Chef =                                 2.31
  9. Hell’s Kitchen =                               2.16
  10.  Bachelorette =                               2.07
  11.  American Ninja Warrior =         1.92
  12.  So You Think You Can Dance=  1.84
  13.  Night Shift =                                   1.83
  14.  Extant =                                           1.68




The cursory review of these results provides apparent conclusions on the demographics of certain programs. A show such as Big Brother is at the bottom of the Top 10 in overall viewers, yet it compromises the second, third, and fourth place slots in the 18-49 demographic which aptly reflects the younger audience for the program.


Stephen King’s science fiction concept, Under the Dome, is third in overall viewers with a whopping 10.1 million viewers for a summer show, but it ranks 5th in the 18-49 demo with a 2.43 rating. That reflects two issues, a stronger viewership in older viewers which is interesting given the content of the show, and a loss in viewers that is trending downward. The show has been killing off popular cast members, causing some viewers, my wife and I included, to discontinue viewership of the program.


The reboot of Jack Bauer’s character in 24: Live Another Day is 5th in overall viewers and 6th in 18-49 aged viewers which demonstrates the appeal to that demographic almost exclusively.

The ABC reality series The Bachelorette, is 8th in total viewers and 10th in the 18-49 category proving that the program appeals to a range of audiences including an older audience of people over 50. This series is the only top 10 program for ABC and it hurts the network because they cannot sell advertising time for the show anywhere near the rates that the other 3 networks can command.  NBC has A.G.T. which is the top show in 18-49 ratings, CBS has Big Brother which is a powerhouse show for the target demographic as well as Under The Dome, and FOX has 24 which is 6th in the coveted 18-49 ratings.


Finally, the group of shows Extant, Unforgettable, and Night Shift are great examples of programs that receive excellent overall ratings and limited to no 18-49 demographic support. Extant pulls down an average of 9 million viewers, yet it is fourteenth on the 18-49 list. Night Shift on NBC is very similar with 8.3 million total viewers and a thirteenth place showing in the 18-49 bracket. Unforgettable on CBS is the 7th most watched show of the summer and is not anywhere near the top 15 in the 18-49 group meaning that the majority of those viewers are older based on the time slot and data, they are not younger than 18.


Summer Ratings Outlook


The data is clear, the broadcast networks have come to compete with the cable networks and the internet streaming services for viewers and ratings. Some of the networks have been pretty innovative in producing limited summer series which have captured viewers, others have gone the reality show route or the talent competition route to draw in viewers.


This data proves that many Americans enjoy watching television and demand more choices and options, even in the summer time. The data has even driven some networks to end their summer series during the same week their Fall television programs are set to premiere. A few years ago that decision would have been unthinkable.

It is also apparent from this summer television data that whether you are watching Jack save the day on 24, Big Jim and the next problem the dome will dish out on Under the Dome, Halle Berry’s struggles with re-entry from a long “solo” mission in space on Extant, or the next contestant to move forward on America’s Got Talent; summer television programming is here to stay.


The summer television terrain is no longer a place for second run movies and rebroadcasts of earlier programs, it is a place dominated by new content and original programming. That is a welcome change for both the networks and the viewers.


(Ratings data, demographic data, advertising revenue data, total TV market/share data courtesy of AC Nielsen, Ad Age, The Wire, and TV


TV Wars: Aveo Loses Supreme Court Decision – Follow Up

In a follow up to a previous piece I did on this blog entitled “TV Wars”, the Supreme Court ruled today that the service known as Aveo should be required to pay licensing fees to broadcasters in order to display copyrighted programming. Aveo is a service that transmits broadcasts of TV programming over the Internet via their technology, which subscribers pay a fee to utilize.


The argument from Aveo’s side was that their service did not broadcast the programming to everyone over the Internet that the programming was provided only to their subscribers, who paid a fee to receive the service. Since it is not a public broadcast, then they should not be required to pay the licensing fee. The argument continued that they merely rented a small broadcast antenna to each of their subscribers to access the copyrighted programming, which should not require that they (Aveo) pay a licensing fee to the broadcasters.


The Supreme Court disagreed, they ruled that the Aveo service was just like a cable television service, which under the current system, are required to pay licensing fees to broadcasters in order to display copyrighted programming. Therefore, Aveo will be required to pay licensing fees to the broadcasters, which they cannot afford to do.


It is important to note that if the Court had ruled in favor of the current setup of Aveo, it would have completely altered the landscape of the television industry. A favorable ruling for Aveo would most definitely trigger the major cable television players to develop Internet based antenna rental services similar to Aveo in order to circumnavigate the payment of licensing fees.


A favorable ruling for Aveo also would have created a situation where the network television broadcasters would stand to lose huge amounts of licensing fee revenues. It would have created an environment where many people would continue to cancel their cable television plans, known as “cord cutting”, which would have created losses of revenue for the big cable television service providers such as Comcast and Time Warner Cable.


Status Quo


Instead, the ruling today effectively retains the current system and most likely marks the end of the Aveo service. Their CEO essentially stated that the ruling makes their business model unviable moving forward. The technology that Aveo developed does have an inherent value, which the ownership of Aveo will have to determine if they are going to sell off to an interested party in the future.


The ruling today by the highest court in the land also purposefully went out of the way to create a distinguishable difference between the Aveo service and other Internet based entertainment providing services and cloud based services. It is unclear at this point if they went far enough to make that differentiation and only future judiciary activity will determine that scenario.


This portion of the ruling opinion of the high court would deal with only certain new technologies and not others that I had mentioned in my original article on this topic. The larger internet based entertainment programming services providers such as Netflix and Amazon already pay huge licensing fees to the broadcasters and movie production companies to obtain the rights to stream copyrighted programming to their subscribers.


Big Business


In fact, the recent agreement between Amazon and HBO which provides the Amazon Direct internet streaming service with the exclusive rights to a huge catalog of HBO produced series was a deal with significant impact for everyone involved. Those types of exclusive streaming rights deals will only continue in the future, as the popularity of services such as Netflix, Amazon, and now Google’s Fire TV will continue to increase their respective subscriber bases.


These types of exclusive rights deals with the big internet streaming services provide a huge injection of revenue dollars to the broadcasters and the networks involved such as HBO or CBS. In fact, CBS syndicates and produces so many different series across a variety of networks that their stock increased on the news of the favorable Supreme Court ruling today.


In my view, that is what I take away from the decision today by the Supreme Court that the consumer in some ways is the loser here too. The Aveo service, as the dissenting opinion of the Court explained, was not providing a public display of content rather the service was provided to subscribers. Therefore, the three dissenting and more conservative justices felt that the subscription fee negated the need for Aveo to pay licensing fees to the broadcasters.


The Dissent


I would tend to agree with the dissenting opinion, the Aveo service was providing the consumer with another option to view broadcast television programming. It was providing choice and fostering competition in the Internet subscription based entertainment space. This decision is going to dismantle Aveo, and in many ways destroys the very ingenuity and entrepreneurial spirit which America should espouse.


I think of all the time, money, and energy that the employees and developers at Aveo dedicated to designing and marketing their service, which is a unique technology, and I think the Court ruling sends the wrong message to the small business owner or the entrepreneur. This type of service should be promoted and not dismantled, other business owners could see this news today and decide not to move forward with a new product or an idea for a new service, and that can and will be detrimental to our collective best interest in American society.


However, it should also be noted that I am in no way in favor of a service that would infringe upon the copyright protections that these broadcasters and networks operate within. The networks and television broadcasting industry spends a significant amount of money on the production and the copyright legal protections for their programming. I am in no way promoting a service which would violate any copyrighted programming and broadcast these programs to a general public audience in violation of federal laws.


In relative terms, as a writer, if someone took my copyrighted written material and put it out into the general public in a way which misrepresented me and violated my rights that would be a huge issue. However, that was not the issue at hand here, because the subscription fee and the manner in which the programming was presented by Aveo with integrity made this case a difficult one for the judiciary system necessitating a ruling from the Supreme Court.


This decision effectively rewards the big broadcasting companies and eliminates a source of competition for the huge cable television operators. We should be fostering competition in the marketplace, yet between mergers and acquisitions and increased regulatory activity, the government is eliminating competition from our marketplace. This type of activity could prove ultimately detrimental, as we have seen in the course of history with monopolies in various industries in the past.


This ruling today is being reported by the media that it has moved the TV landscape into a state of clarity and removed some ambiguity. I disagree with that sentiment, I think the ruling today was only the beginning of another mountain of litigation driven by the broadcasters and networks and the groups which represent their collective interests with the goal of elimination of competition from the marketplace.


This ruling did not push our court system towards the end of the TV wars, in fact, I would argue, it is just the beginning.



(Some background information courtesy of Yahoo! News)

Current Marketing Trends in Broadcast Television

I spent some time over the past few nights catching up on the hit summer TV series “Under the Dome”, thanks to the Amazon Instant Video service. This series, based on the book by Stephen King, has been a huge success for CBS, and according to the Nielsen ratings, it is the number one scripted TV series this summer.


So I began to think as I watched the various characters from “Under the Dome” such as Barbie, “Big Jim”, Angie, Norrie, and Junior: what makes this show a hit? I think it is a combination of an interesting plot, neat special effects, and some good character development.


The series also delivers something else: the “it” factor among the key demographic of 18-34 year old viewers. The “Dome” also has a huge social media buzz, which is vital to capturing that demographic.


The success of “Under the Dome” is a good case study in the future of broadcast television marketing. Personally, I have my wife to thank for getting me into the show because initially I had no real interest in watching it.  It made me think about how the marketing of television programming has evolved, and will continue to do so in the future.


NBC says “Me too”


Anyone who has worked in marketing, as I have, is familiar with the “me too” approach. A product or a concept is launched and is met with success, so the competition lines up in those instances to launch a similar product or concept.

In this case, due to the success of CBS with Stephen King’s “Under the Dome”, now NBC and their programming chief, Bob Greenblatt, announced that they will be running a new version of Stephen King’s “Tommyknockers” during the upcoming TV season.


This news and the news on some other mini-series launches were covered by The Hollywood Reporter, who also reported the announcement that NBC had hired Quinn Taylor away from ABC to run their mini-series and “longform” programming. This move is significant because Mr. Taylor has worked on previous Stephen King mini-series projects (


The other mini-series projects announced by NBC include:

  • Mark Burnett produced series sequel to “The Bible” series which aired on The History Channel during Lent
  • Hilary Clinton project with Diane Lane playing the former First Lady, Senator, and Secretary of State
  • A re-make of Rosemary’s Baby based on the wildly popular book and movie


Now, in fairness to NBC, Mr. Greenblatt has stated his commitment for a long time now to limited series, special event, and live television programming. I have written previous articles about the need to make changes to the marketing and promotion of broadcast television programming, the limited series approach is one strategy which could be successful in delivering increased ratings.


Along those same lines, NBC is going to air a special event quiz show, which will run continuously for a certain number of days streaming over their website. The quiz show will air a segment in prime time each night over the course of the event, and will be hosted by Ryan Seacrest.


Finally, NBC is expanding their commitment to live sports television programming by landing the U.S. broadcast rights to the English Premier League soccer games. They will air games live on NBC and the NBC Sports Network. The network will also continue their exclusive coverage of the Olympics with the Winter Games in February 2014.


A Changing Landscape


I have written previously about the changing landscape of television, and the plethora of devices and services which provide content streaming over the internet.


The premium cable channels such as Starz and Encore have expanded their own production on original series and mini-series programming. The entry of subscription content providers, such as Netflix, producing their own original series content has added further competition to the major networks.


Some media analysts believe that the network TV model of the 24 episode season running from September to May, with the break at the holidays and the traditional “sweeps” periods may be an outdated timetable.


The success of series in the summer months, such as the before mentioned “Under the Dome” further forces the analysts, the network executives, and the advertising industry to think about changes to the traditional model for broadcast television.


An economy still in recession, and the rising costs of other entertainment choices, left many families at home this summer which lead to a rise in TV viewership. Overall, the major networks all declined in ratings last year, especially in the key demographics, according to Nielsen. Each network has a different strategy to get their share of those viewers back.


Fall Strategy


The strategy at CBS is to stay with their lineup with minimal changes, they are the top broadcast channel by total viewership and their hit shows (NCIS, Two and a Half Men, The Big Bang Theory, The Good Wife, The Mentalist, Person of Interest, and The Amazing Race) are well known and well established shows.


The biggest new entry for the network is the return of Robin Williams to television in “The Crazy Ones” which they are heavily promoting. I think that the viewers are going to find the concept of the show as really underutilizing Williams’ acting talents, and the show will not be successful.


I will quantify that statement by reminding you that to be a successful new program at CBS you have to draw a huge number of viewers because they are the top network. It is easier to be a new show on a lower ranked network than to be a new show on the top network. CBS cancelled “Vegas” and it averaged 16 million viewers! That would be considered one of the best shows on one of the other major networks.


The strategy at NBC was detailed earlier, but the peacock network also wants to reclaim the Thursday night top comedy night spot from CBS. Their strategy to achieve this objective is to bring back Sean Hayes and Michael J. Fox to their own respective new comedy projects for primetime Thursday slots.


I believe that “The Michael J. Fox Show” will be a successful concept, but other critics think it will fail because it is a comedy that deals with Parkinson’s disease, which could be objectionable to some viewers. I think the very loyal fans of Mr. Fox will support the show and keep it on the airwaves.


I believe Mr. Hayes and his concept will be unsuccessful, and that NBC overall will still lose the Thursday night ratings war to CBS.


The strategy at ABC is to continue with their established programs (“Grey’s Anatomy”, “Once Upon A Time”, and “Modern Family”) while adding some new concepts such as: “Marvel’s Agents of S.H.I.E.L.D.”, “Once Upon a Time in Wonderland”, and “Betrayal”.


The critics are mostly not enthusiastic for the other new shows they plan to introduce, and I think that ABC has relied too heavily on the fantasy angle with “Once..”, and on shows with a great deal of negative plot lines such as “Revenge”, “Scandal”, and “Betrayal”.


In the end, the networks will be challenged by the changing demographics and how the average viewer uses various technologies to view TV programming and content. The main objective will be innovation, and some luck, which will determine which network will land the next “it” show concept like “Under the Dome”. We will know more by the mid-season point which network was successful in marketing that concept.